Buying a business is more than simply clicking a button and -boom- you now own a business. While it can look like that from the outside and how media makes it seem, there is so much more to the process, and it can leave you overwhelmed, confused, and looking for help. Thankfully, nothing says you can’t use a checklist or ask for help and guidance.
ReVera Capital understands the ins and outs of buying a business and can help simplify the process. We recommend starting this conversation as early as possible to avoid as much stress and confusion as we can.
Where Are You in the Process?
Of course, you need to find a business to purchase. You may have a family friend or a friend of a friend looking to sell, but what is more likely is that you will have an industry you seek to get into. You can use online broker sites or franchisors, but an advisor might be your best bet for finding a business that intrigues you and checks all the boxes you have for yourself. Those boxes might be having a positive cash flow, in an industry you’re familiar with, having a long-term growth plan, or having a diversity of customers.
If you are just starting on the path of buying a business, an advisor can work closely with you to understand your goals and find you the company that best aligns with your future, budget, and industry.
Become a Detective on the Business
The next step to buying a business is becoming Sherlock Holmes, well, close enough. This is where you will dive deep into their financial information, industry information, business background, personnel, and management. This is a significant step to take on, and help from an advisor can ensure you don’t miss anything crucial and that the business isn’t intentionally leaving out information that could leave you struggling once the business is yours.
You and your advisor, such as ReVera Capital, will work together to gather data on the company’s tax returns, balance sheets, proposed selling price, competitive analysis, history of the business, the seller’s intellectual property, staffing forecast, and every other little detail that will help dictate whether it is a good choice for you.
Calculate Its Value
With your advisor, you can now move forward with calculating the business’s value. It will likely have a proposed price, but your due diligence on its liabilities, debts, profits, and assets can help dictate whether that is reasonable. Your advisor will guide you through which value option is the best to go by, whether asset-based, market-based, or income-based. This will give you a clear picture before you sign.
Find Your Best Purchase Option
Do you know one of the best reasons to hire an advisor? They can be your personal negotiator in the purchasing process to ensure your voice is heard, and the seller does not throw you any unnecessary curve balls. Advisors, such as ReVera Capital, can negotiate on your behalf to achieve favorable terms. Don’t wait to bring on an advisor until this step. The sooner you bring on an advisor, the sooner they can ensure you purchase the right business at the right price and time.
The Best Part of All? You Don’t Have to Do It Alone!
From when buying a business is just an idea in your head to when you are being handed the keys to the business, you can have an advisor by your side. Not only will this ensure you have an expert giving you an extra pair of eyes on one of the largest deals you will make, but it will give you access to support and knowledge you would otherwise not have.
Finding an advisor to partner with should be done far before the late stages of the buying process. The last thing you want is to pay more than you have to or miss crucial information in the investigation stage.
Don’t buy a business alone—partner with an investment bank that will get you the best deal. Contact ReVera Capital today.